Record cereal production in 2021 not sufficient to prevent a drawdown in global inventories

FAO’s latest information points to a record cereal production of 2 800 million tonnes (including rice in milled terms) in 2021, up 1.1 percent from the outturn in 2020. However, at this level, production would still be less than the anticipated consumption requirements in 2021/22, leading to a drawdown in world inventories.

Improved prospects for wheat and coarse grain crops have lifted the overall global cereal production outlook by 12.1 million tonnes (0.4 percent) since the previous report in September, with the bulk of the increase associated with better production prospects for wheat. FAO’s latest forecast for world wheat production stands at 776.7 million, 7.2 million tonnes higher than the previous figure in September and on par with the output in 2020. The upward revision principally reflects higher yield estimates in some areas of Eastern Europe owing to conducive weather conditions throughout the season, with also sown area in Ukraine proving larger than earlier predicted. The wheat production forecast for Australia has also been lifted, based on continued beneficial weather that reinforced good yield expectations, while in Canada, although the wheat output is still foreseen to fall sharply in 2021, the forecast was raised to reflect moderately better yield prospects. These increases more than offset a cut to the wheat production forecast for the Russian Federation, where the winter harvest has been completed and results show lower yields than previously envisaged, due to the adverse effects of dry weather conditions.

Global coarse grains production in 2021 also has been raised by 4.3 million tonnes since September and is now pegged at 1 504 million tonnes, 1.6 percent higher year-on-year. The upturn in prospects this month is largely associated with the barley and sorghum crops. Mostly due to improved yield prospects in Australia, global barley production forecast has been raised by 1.9 million tonnes to 149.3 million, albeit still 6.7 percent lower than in 2020. Similarly, the forecast for world sorghum production has been lifted, though moderately, with the global output expected to reach 65.2 million tonnes in 2021, 7.6 percent higher year-on-year, with the month-on-month revision mostly linked to an increase in the sorghum acreage estimate in the United States of America (USA). The forecast for global maize production remains largely unchanged, at 1 192 million tonnes, 3.0 percent higher than the previous year. An upward revision to the production forecast for the USA, underpinned by an upturn in yield expectations in eastern states, was offset by a lower forecast for the European Union (EU), where dry weather conditions in eastern countries have curbed yield prospects. FAO’s forecast of world rice production in 2021 has been scaled up by 617 000 tonnes to 520 million tonnes (milled basis), up 1.3 percent from the 2020 all-time high. The latest revision primarily reflects more buoyant expectations for India’s main crop, although a reduced incidence of drought and floods has also lifted the outlook for China (Mainland) and Thailand. Conversely, prospects are down for Pakistan and Mali given planting delays caused by water constraints, which in the case of Mali were compounded by insecurity problems. Expectations of higher area loss have also further lowered forecasts for the United States of America

World cereal utilization in 2021/22 is now forecast at 2 811 million tonnes, up 2.7 million tonnes from September and 49 million tonnes (1.8 percent) higher than in 2020/21. The forecast for total wheat utilization has been raised by 1.6 million tonnes since the previous report to a record 779 million tonnes, surpassing the 2020/21 estimated level by 2.4 percent (18.6 million tonnes). Although food consumption accounts for most of the total utilization of wheat, the projected growth in 2021/22 largely stems from an expected 6.4-percent rise in wheat feed use, especially in China, the USA, the EU and the United Kingdom (UK), driven by strong demand and high prices of coarse grains. Total utilization of coarse grains in 2021/22 is forecast at 1 513 million tonnes, up 2.1 million tonnes from the September report and 1.4 percent (20.6 million tonnes) from the 2020/21 estimated level. Accounting for the bulk of this month’s upward revision and the year-on-year increase in total utilization of coarse grains, the forecast of maize use in 2021/22 has been lifted by 1.5 million tonnes, to 1 197 million tonnes, pointing to a likely 2.0 percent (23.5 million tonnes) increase from the 2020/21 level. While sorghum utilization is also forecast to rise in 2021/22 (by 3.1 percent or 2.0 million tonnes), barley utilization is seen falling (by 1.6 percent or 2.5 million tonnes) from its record level in 2020/21 on expectations of lower feed and industrial demand in North America and Europe. Mirroring revisions to utilization forecasts for India, FAO has downgraded its forecast of world rice utilization in 2021/22 by almost 1.0 million tonnes to 520 million tonnes. Despite the revision, world rice total use is still anticipated to grow in 2021/21 by 1.8 percent to reach a historical high. The increase is expected to rest on a 1.6 percent annual expansion in food use, complemented by a 10.4 percent rise in animal feed use.

The forecast for world cereal stocks by the close of the 2022 seasons has been raised by 8.9 million tonnes since the previous month to 817 million tonnes, but still down 3.0 million tonnes (0.4 percent) from their opening levels. This month’s higher forecast for ending stocks results in a marginally higher 2021/22 cereal stocks-to-use ratio of 28.4 percent, down slightly from the 2020/21 ratio of 29.2 percent but indicating an overall comfortable level. Nearly unchanged this month, global wheat inventories are anticipated to fall by 0.9 percent (2.6 million tonnes) from their opening level to 284 million tonnes, with most of the foreseen drawdowns concentrated in Canada, the Russian Federation and the USA due to anticipated production falls. FAO’s forecast for world coarse grains stocks has been revised upwards this month by 7.1 million tonnes, mostly on predicted higher maize stocks in China and the USA. Despite these revisions, world coarse grain stocks are still seen heading to a slight decline in 2021/22 of 0.4 percent (1.5 million tonnes) below their opening levels on account of a foreseen drop in world barley inventories owing to reduced global production. By contrast, world maize stocks are set to recover slightly from last year’s six-year low, rising by 1.0 percent (2.8 million tonnes) to 288 million tonnes in 2021/22. Primarily reflecting prospects of even higher accumulation taking place in rice exporters (particularly India), global rice stocks at the close of 2021/22 marketing seasons are now seen 1.1 million tonnes above their opening levels at a fresh peak of 187 million tonnes.

FAO’s latest forecast for world trade in cereals in 2021/22 has been raised by 7.4 million tonnes to 473.2 million tonnes, but still pointing to a small contraction of 0.3 percent (1.6 million tonnes) from the 2020/21 level. World wheat exports in 2021/22 (July/June) are forecast at 188 million tonnes, remaining near the 2020/21 record level, following an upward revision of 2.9 million tonnes mostly because of stronger import demand in Nigeria and several Asian countries. Larger-than-earlier-anticipated sales are forecast for Australia, the EU and Ukraine, supported by better production prospects, which more than offset a lower export forecast for the Russian Federation. For coarse grains, despite this month’s 2.7 million-tonne upward revision, trade in 2021/22 (July/June) is expected to remain below the 2020/21 level by 1.3 percent (3.1 million tonnes), with declines forecast for both maize and barley trade. FAO’s forecast of world maize trade is lifted this month on foreseen larger imports by Canada and the Republic of Korea to meet higher feed demand, but still points to a decline of 1.3 percent (2.5 million tonnes) from its record level in 2020/21 with a fall in exports from Brazil and the US seen overshadowing an increase in sales from Argentina and Ukraine. Reduced demand from Morocco and China due to ample domestic supplies, with increased production in the former and following a year of high imports in the latter, are seen lowering world barley trade in 2021/22 by 6.7 percent from the 2020/21 record level. Following a 1.8 million tonne upward revision from September, world trade in rice is now forecast to reach 50.2 million tonnes in 2022 (January-December), up from the revised forecast of 49.2 million tonnes for 2021.

Summary Tables

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1/  Production data refer to the calendar year of the first year shown. Rice production is expressed in milled terms.
2/  Production plus opening stocks.
3/  Trade data refer to exports based on a July/June marketing season for wheat and coarse grains and on a January/December marketing season for rice (second year shown).
4/  May not equal the difference between supply and utilization due to differences in individual country marketing years.
5/ Major wheat exporters are Argentina, Australia, Canada, the EU, Kazakhstan, Russian Federation, Ukraine and the United States; major coarse grain exporters are Argentina, Australia, Brazil, Canada, the EU, Russian Federation, Ukraine and the United States; major rice exporters are India, Pakistan, Thailand, the United States, and Viet Nam. Disappearance is defined as domestic utilization plus exports for any given season.

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